Pharmaceutical corporation Biogen Idec is moving out of corporate venturing, according to comments made by Steve Holtzman, Biogen Idec’s executive vice president of corporate development, in an interview with finance website Xconomy.
Launched in 2004, one year after the company was created from a merger between pharmaceutical companies Biogen and Idec, Biogen Idec’s corporate venturing division, the New Ventures Group, has since invested $200m. However, the unit is being shut down in favour of further licensing partnerships with pharmaceutical companies which are working on drugs in a later stage of development.
Biogen Idec invested $45m in Portola in October and $29m in Isis Pharmaceuticals two weeks ago, in the form of upfront payments, and acquired the remainder of its joint ventures with biopharmaceutical corporation the Dompé Group in September, citing a desire to return to the core elements of its business.
In addition to the move away from corporate venturing, Biogen Idec is also closing its startup incubator in order to invest more cash in internal research and development (R&D).
Holtzman said, referring to the notion that corporate venturing can grant greater access to new technology: "As someone who was a [chief executive] of one of those startup companies, and had Novartis Venture Fund as an investor, you owe it to the shareholders, and you owe it to yourself, if you have something interesting, to go get the best deal that’s right for your company. Therefore, there are no preferred seats at the table."
Holtzman added that since many of the Biogen Idec executives, including chief executive George Scangos, head of R&D Doug Williams and himself, have been in biotechnology for years, they have extensive contacts in the venture capital world who can keep them updated on fresh external developments in technology.
In regard to such external technology, Holtzman said: "I’d submit to you that the best window on novel technologies comes from your scientists, who are identifying new things all the time."
However, Holtzman did not rule out all forms of equity investment. Biogen Idec is still open to making equity investments in smaller firms as an element in a strategic partnership deal, alongside upfront, milestone and royalty payments.